Update to taxi grant criteria

Taxi and private hire drivers who have received state benefits at any time since March last year will now be eligible for a £1,500 business support grant as long as they meet the remaining criteria.

Business Minister Jamie Hepburn confirmed that the change would come into effect immediately to ensure that drivers on the lowest incomes can access support.

Mr Hepburn warned that UK Government Universal Credit rules mean that drivers could lose out overall if the grant is considered to be income by DWP. However, the change will allow people to make a decision based on their individual circumstances.

The Minister has written to the Secretary of State for Work and Pensions requesting a guarantee that taxi drivers in receipt of state benefits would not be penalised for receiving the grant, which is intended to cover fixed business costs.

Councils will start contacting eligible drivers this week to brief them on their potential entitlement and ask them to provide supporting information and bank account details. They do not need to apply, or contact the local authority.

Mr Hepburn said:

“This week local authorities will directly approach an estimated 38,000 private hire and taxi drivers inviting them to claim this grant, which is intended to assist with fixed costs and expenses.

“We have responded to the concerns of drivers and we have removed grant conditions relating to state benefits. However, we remain justifiably concerned that any payment would simply be deducted from an applicant’s benefits. That is why I am urging the Secretary of State to do the right thing by drivers on the lowest incomes.

“Without a change by the UK Government, making these payments would benefit the Department for Work and Pensions budget, not the drivers, and risk using Scottish Government resources in a way that fails to provide additional support to many taxi drivers struggling to deal with the impacts of the coronavirus (COVID-19) pandemic.

“We will keep drivers updated on the outcome of our engagement with the DWP."

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Full Letter to Thérèse Coffey, Secretary of State for Work and Pensions

18 January 2020

Dear Thérèse,

I write to seek your assistance in supporting licensed taxi and private hire drivers in Scotland.

Today the Scottish Government announced plans to triple previously announced funding from £19 million to £57 million, to provide a one off-grant of £1,500 per driver affected by the pandemic.

This week local authorities will directly approach an estimated 38,000 private hire and taxi drivers inviting them to claim the grant, which is intended to assist with fixed costs and expenses, including licence plate fees, rental fees and insurance payments for taxis not on the road.

In doing so we are seeking to supplement the support from other funding for loss of income available through the Scottish and UK Governments.

The core condition of eligibility for this financial assistance is that taxi or private hire drivers must be licensed for the period 9 October 2020 to at least 31 January 2021.

In addition we have asked local authorities to confirm that up to 31 December 2020 drivers:

• have experienced loss of income (50% of turnover, compared with 2019) and incurred overhead costs and expenses;
• are or have been working or available for work as a taxi or private hire driver; and
• are not in receipt of state benefits payments (Universal Credit, Statutory Sick Pay, Employment and Support Allowance, Job Seekers’ Allowance, Income Support) or have applied for but not yet started receiving Universal Credit at the time of applying.

I am eager to remove that final condition, but only if that benefits the drivers and not the DWP.

As you know, Universal Credit payments reduce as a person’s income increases so we are justifiably concerned that any payment would simply be deducted from an applicant’s benefits.

Without a change, making these payments would benefit the DWP budget, not the drivers, and risk using Scottish Government resources in a way that fails to provide additional support to many taxi drivers struggling to deal with the impacts of the pandemic.

As mentioned above this scheme is designed to help with fixed costs and is not intended to replace lost income, so I believe that it could be argued that it is inappropriate for this to be considered as income for the basis of calculating Universal Credit.

However, I would appreciate your confirmation of that point. I would ask you therefore to amend the criteria to ensure that drivers on Universal Credit can benefit from the full £1500 payment without it reducing their overall income.

As mentioned local authorities are in the process of making contact with taxi drivers about this support this week so clarity on the DWP position is required urgently.

JAMIE HEPBURN
MINISTER FOR BUSINESS, FAIR WORK AND SKILLS

Background

More details and full eligibility criteria available here.